Michael R. Martens, CBC LPRT Qualifies for Eagle Award

(Washington, DC) -- The Leading Producers Round Table (LRPT) of the National Association of Health Underwriters (NAHU) is proud to announce that Michael R. Martens of First Staff Benefits has qualified to receive the association’s Eagle Award.

Mike has qualified for this award due to his exceptional professional knowledge and outstanding client service. This is his eighth consecutive year of qualification. Mike’s career spans a total of 31 years in the group insurance industry and he also has earned the designation of Chartered Benefit Consultant (CBC). First Staff Benefits is located in Knoxville, TN and are recognized industry experts in Affordable Care Act compliance for the staffing industry.

The National Association of Health Underwriters represents 100,000 professional health insurance agents and brokers who provide insurance for millions of Americans. NAHU is headquartered in Washington, DC. For more information, please contact Kelly Loussedes at 202-595-3074 or kloussedes@nahu.org.

Staffing Industry and Employer Mandate Regulations

Temporary staffing firms and PPACA are at odds. Recent employer mandate regulations published by the IRS on February 10, 2014, reveal the tension: the IRS worries that if staffing firms get any breaks, businesses will be incentivized to use staffing firms to minimize their PPACA obligations, while staffing firms worry that the added costs of PPACA will potentially cripple their business.

The staffing industry asked three main questions of the IRS and received answers which will greatly affect how much cost they must pass on to their clients.

First, the staffing industry asked the IRS if their employees could be presumed to be variable hour employees. This would be desirable because employers of variable hour employees can avoid IRC § 4980H liability while not offering coverage during the first year of employment. The IRS rejected a general presumption and instead directed staffing agencies to follow a multi-factor analysis in order to determine whether each employee is or is not a variable hour employee.

Second, PPACA states specific rehire rules; a previously terminated employee is not considered a new employee unless there was a break between employment (typically 24 weeks). Because staffing agencies typically have employees who return for many jobs, they requested a shorter break of 4 weeks before an employee is considered a new employee. The IRS rejected this rule.

Finally, temporary staffing firms asked for guidance on when they can count an employee who is not working on assignments as having separated from service with the firm. This determination is significant in certain non-PPACA contexts such as eligibility to receive a distribution from a qualified plan (see, for example, section IRC § 401(k)(2)(B)(i)(l)) and the requirement to provide a notice of continuation coverage under COBRA (see IRC § 4980B). Essentially, to the extent it is easier to count an employee as separated from service, it would likely lower the cost of PPACA compliance to the staffing firms under PPACA rehire rules. The IRS gave no guidance, instructing staffing firms to use reasonable methods consistent with general practices for other purposes.

In sum, temporary staffing firms, by their nature, are among the most vulnerable to PPACA’s added cost to employers. Because of the tension between the services they offer and the stance of the IRS, careful planning will be required in order to achieve a cost-effective solution.

Target to Drop Part-time Coverage in April—Looking at Alternatives for Part-Timers

Target announced recently that they will discontinue offering health insurance plans to their part-time employees beginning April 1, 2014. With this announcement, Target joins a trend of cutting part-time coverage including companies like Trader Joe’s and Home Depot. While this strategy is effective for certain employers, other employers may not yield a significant benefit from this strategy. Individual employers must examine the specific aspects of their business and the needs of their employees to realize their best strategy for PPACA planning.

Beginning in 2015, PPACA will impose penalties on businesses employing 50 or more full-time employee equivalents who do not offer health plans meeting specific criteria to their full-time employees. There are no penalties for employers ceasing coverage of part-time employees. Also, certain individuals (e.g. under 400% of poverty line) seeking insurance on public exchanges can receive cost-sharing subsidies discounting their premiums and tax credits if their employer does not offer them an affordable minimum value plan. Target cited low participation and making subsidies available to part-time employees as the main reasons for dropping part-time coverage. As Target executive vice president of human resources, Jodee Kozlak, explained in a blog post, “The launch of Health Insurance Marketplaces provides new options for health care coverage that we believe our part-time team members may prefer. In fact, by offering them insurance, we could actually disqualify many of them from being eligible for newly available subsidies that could reduce their overall health insurance expense.”

Target’s choice to drop coverage of part-time employees reveals the unfortunate wedge PPACA drives between Target and their employees by tying employer penalties to employee subsidies. If the two were separated, Target could probably continue offering a plan.

Companies with a significant part-time work force will need to weigh the pros and cons of what health packages will work best for the employer and employees. Thus, even among alternatives, careful planning is required to ensure the best results for employers and employees.

Three Million on Exchanges

On January 24, the Department of Health and Human Services announced that they estimated three million individuals had enrolled in a private health insurance plan on the federal and state-based exchanges. This statistic reveals two aspects of PPACA that many will want to consider.

First, the more individual plans that are tied to exchanges, the more permanent PPACA is likely to become. While there is still considerable political attention around PPACA, the fact remains that three million individuals have found health insurance on this platform. Because repealing PPACA would disrupt coverage to these individuals, PPACA gains permanence as the enrollments continue to rise. While the numbers of enrolled are short of the governments estimations, given the website issues the numbers are not unexpected.

Additionally, participation of young and healthy individuals may be high enough to avoid adverse selection. Adverse selection occurs when too many unhealthy individuals comprise an insured group. The cost of health care for the group is likely to exceed the total premiums paid by the group. In such a case the insurance would fail; the insurance company would run out of money because costs would exceed total premiums. In order to compensate for the likely influx of unhealthy individuals, the exchanges will need to insure a sufficient number of young healthy individuals, or other groups with predictably low health care costs. The individual mandate will compensate for some of this risk management by taxing those without insurance, but sufficient participation by young healthy individuals in the exchanges would be a better hedge against adverse selection. The Department of Health and Human Services recently announced in a press release dated January 13, 2014, that 30% of those who selected an exchange plan as of December 28, 2013 were younger than 35. Given the fact that exchanges are still less that a year old, this is promising news.

As more and more Americans use the exchanges to procure health insurance, those exchanges will gain permanence and sustainability.

That's a Tall Order

As we race closer to 2014, the Patient Protection and Affordable Care Act (ACA) continues to impose its will upon companies. This photo, offered by Senator Mitch McConnell of Kentucky, is a 7-foot tall stack of PPACA regulations. It starkly displays the stress, struggle, and confusion that
businesses are faced with NOW in planning for PPACA matters. Hand it all over to Enrollment First, Inc. and First Staff Benefits. We have the solution in place now and will work with you to assess your benefit needs, prioritize your goals, educate and communicate information to your diversified workforce, and guide you through every step of the process.

Beyond ACA Compliance

Business owners and CEO’s have been focused on trying to get their hands around how to comply with the upcoming requirements under the “employer mandate” for large groups associated with the Affordable Care Act (ACA). I can assure you that effective and affordable compliance solutions are on the way. There will be programs that take you out of the “penalty box” and allow you to focus on growing your business. However, beyond the compliance issue there are two factors that likely have not yet hit the thought processes of the above mentioned individuals and companies. Those issues deal with HR analytics/metrics and employee communication/educaton.

We are now one third of the way through 2013. If a company has elected to implement a 12 month look back period for eligibility, the question that has to be addressed is are the policy, procedures and measurement tools active and in place to manage those processes? If not, when will they be? How many employees have you hired since January 1, 2013? Are you measuring both their look back periods and eligibility status based on hours worked year to date? This can be a daunting task if much more time goes by before effective management tools are implemented. The ability to effectively manage this data is the “new normal” for benefits administration.

The second issue is employee communication. When the federal government begins to release information on the exchanges and individual responsibilities under ACA in October of this year, where will your employees go to get answers? Will they call your HR department? Can you manage the increase in inquiries? Will you be prepared when that event occurs in just over 150 days?

When evaluating a benefit solutions provider, I strongly encourage you to include the above in your decision making process. We are all going to breathe a sigh of relief with product solutions that are there to help us, but that may not even be half the battle.

For more information regarding Enrollment First, Inc., First Staff Benefits, or their health care reform blog, please visit their websites at enroll1st.com or firststaffbenefits.com.

Enrollment First, Inc. and First Staff Benefits, compassionate leaders in the health care industry, are providing health care reform guidance for their clients before the full implementation date, set for October 1, 2013.

Knoxville, TN (PRWEB) April 11, 2013

Enrollment First, Inc. and First Staff Benefits, compassionate leaders in the health care industry, are preparing their clients for the host of challenges linked to health care reform and the ongoing implementation of the Affordable Care Act (ACA).

The two companies have tweaked their approach and are devouring the totality of the legislation while tackling health care reform with their clients -- one provision at a time.

“We want everyone to know that we’re in this together. We want to be ready before we cross that bridge,” said Hazen Mirts, president and founder of Enrollment First, Inc. “We understand the importance and significance that health care reform is going to have on everyone involved, and we want to be ready for it.”

Enrollment First, Inc. and First Staff Benefits are not only focused on the impact of health care reform, they are staying ahead of the curve by shifting their roles to that of educators, providing guidance and answers, instilling confidence and creating communications that inform, such as online tutorials, videos and FAQs with help from their legal aid, specifically focused on health care reform.

Mike Martens, CBC, LPRT/Principal of First Staff Benefits emphasized that making a mistake now could be very costly down the road.

“Is anyone else knocking on your door trying to guide you through this maze and take care of it for you?” Martens asked.

Failure to understand the ramifications of the imminent changes could lead to costly penalties, missed tax credits, time-consuming and expensive litigation, and lost opportunities for employees among other consequences. As a result, companies should waste no time in determining exactly how the ACA's extensive mandates might affect their operations.

The effects of health care reform are already being felt. Most recently, PCIP plans have been eliminated as an option for employers to offer their workers. However, the companies’ fixed indemnity limited medical plans currently offered are still valid options and exempt from health coverage requirements. Once law defines "minimal essential coverage," Mirts says they anticipate new options surfacing in the marketplace.

Affordability will continue to be a driving factor. Mirts says they believe many franchise employees will “opt out” of major medical options and look for some level of health protection via the fixed indemnity option. Working with clients to support ACA compliant solutions and providing affordable alternatives for employees who opt out will be key objectives in 2014 and beyond for both Enrollment First, Inc. and First Staff Benefits.

For more information regarding Enrollment First, Inc., First Staff Benefits, or their health care reform blog, please visit their websites at enroll1st.com or firststaffbenefits.com.

Why ACA Will Devastate America's Working Poor

Posted on March 8, 2013

Isn’t it interesting that legislation designed to make the cost of health insurance “affordable” will have the greatest negative impact on the segment of our society who needs it the most? There are still millions of Americans who believe that Obamacare will provide them with “free” health insurance. Well, that is only true for those who will qualify for Medicaid. The catch is that you have to live in a state that expands their Medicaid eligibility. For the rest, it is a disaster.

Regardless whether Americans purchase health insurance through their employer or a state/federal insurance exchange the cost for America’s working poor will be out of reach. Even employer based coverage that is both “affordable” and meets minimum essential coverage will cost the employee $40 or more per week and have deductibles and out-of-pocket costs that will total over $5,000 per year. If their employer does not offer “qualifying coverage” they can go to either a state or federal insurance exchange. It is highly likely that even with a federal subsidy, which those with incomes between 100% and 400% of the federal poverty level are eligible to receive, there will be little or no cost difference between the cost and benefits of employer based coverage versus exchange based coverage. In addition, if their employer offers coverage that meets federal guidelines they will no longer qualify for a federal subsidy through an insurance exchange. This puts the entire cost burden on the consumer.

So what our Congress has done is pass legislation that will leave hard working Americans in low wage jobs not only still unable to purchase health insurance, but with a new tax that will be levied against them when they file their 2014 tax return.

Author: Mike Martens – CBC, LPRT, Principal | FIRST STAFF BENEFITS

And Away We Go

Posted on February 13, 2013

As the health care reform train plows forward into 2013, I am reminded of the Denzel Washington film Unstoppable. Even though we knew that the runaway train of toxic chemicals would not derail and kill innocent people, there was an air of both excitement and anticipation. Didn’t you wonder “how are they going to stop this unmanned train?” I feel the same way about PPACA.

This is a runaway train. Although it is not full of toxic chemicals and will likely not kill innocent people, you can’t help but wonder when logic will enter the equation. It is obvious to me with the recent Treasury and HHS rulings on January 30, 2012, that the administration is finally figuring out that there will be a lot of people who won’t be able to find affordable coverage and therefore be paying the individual penalty in 2015. Have you seen how they are now scrambling to expand the list of those who would be exempt from the individual mandate? One new exemption is that the cost of insurance would create a “hardship”. When premiums skyrocket next year in both the exchange and at the group level, who could not make this claim? I can’t find the definition of a hardship in the regulations. Equally ridiculous is the ruling that affordability is now based on household income. How many employees will provide their employer their household income? How does an employer calculate contribution when the employee refuses to provide that information? I really like the one about exempting “health ministries.”